SCHOTT solutions no. 1/2009 > Pharmaceutical Packaging

SCHOTT focuses on the premium segment for high-quality packaging, where strong growth is expected in China. Photo: SCHOTT/T. Hauser

Pioneer in the Middle Kingdom

China is rapidly developing into an important center for the pharmaceutical industry and continually setting higher standards for quality.

Michael Bonewitz

Pharmaceutical experts from all over the world agree that sooner or later the pharmaceutical industry in Asia will become much more important. According to recent surveys, this opinion is not only held by the companies that are based in Asia, but also by more than 50 percent of all multinational pharmaceutical companies. Whereas most medical products have been manufactured in North America, Europe and Japan, yet another large market is currently establishing itself in China. The People’s Republic, in particular, the country with the highest population in the world, will play a key role for the pharmaceutical industry.

“In recent decades, China has experienced an incredibly fast-paced economic development and now ranks among the leading industrial nations,” explains Dr. Jürgen Sackhoff, head of the Pharmaceutical Systems Business Unit at SCHOTT.

Already today, the Middle Kingdom ranks among the top ten behind the pharmaceutical giants United States, Germany and Japan. Market studies project that China will become the fifth-largest manufacturer in the years to come and even the largest pharmaceutical market in the world by the year 2050.

SCHOTT recognized the signs of the times early. At the end of 2007, SCHOTT-Rohrglas became the very first importer in the world to be certified for the Chinese market by the State Food and Drug Administration of the People’s Republic of China, the SFDA, and this means SCHOTT-Rohrglas is authorized to export Fiolax® specialized glass tubing to China that is then processed into ampoules, vials and syringes.

The total market for glass pharmaceutical tubing products is estimated to be 150,000 tons per year. The premium segment for high-quality packaging is still relatively small. Nevertheless, strong growth is expected in the years to come. In fact, quite a few foreign companies are already addressing the Chinese market.

The modern SCHOTT plant in Suzhou meets the highest international standards for the production of pharmaceutical packaging. Photo: SCHOTT/J. Siefke

“This certification is extremely important to us, because it underscores to our Chinese customers that we are able to meet even the high Chinese demands for quality,” adds Peter Scherer, Vice President Marketing & Sales at SCHOTT-Rohrglas. The State Food and Drug Administration (SFDA) – comparable to the Food and Drug Administration (FDA) in the United States – is currently implementing a sophisticated licensing process for pharmaceutical products and setting the highest standards with respect to quality.

“The fact that we are the world’s first supplier in China to receive certification underscores how seriously we take the Chinese market. For us, approval from the authorities is an important door opener. At the same time, we are sending our customers a signal that we are interested in a long-term relationship,” Scherer adds. During the licensing procedures that took almost two years, SCHOTT had to meet a number of demands, including submitting a complete company profile, declaring the raw materials used, offering insight into quality assurance, naming suppliers and presenting product samples, as well as performing glass and raw material testing.

“China is on the right track. After all, especially in the area of food and drug safety, the demands can never be high enough,” says Dr. Sackhoff. The extremely strict regulations also put local Chinese competitors under pressure, because they will be confronted with certified quality products on their own domestic market. This also applies for vendors who attempt to avoid meeting these commercial requirements by forming joint ventures with Chinese companies.

Quality control of premium pharmaceutical vials in Suzhou. SCHOTT is the first global supplier of pharmaceutical packaging made of glass to manufacture locally on its own in China – and the first importer of specialized glass tubes ever to be certified by the Chinese food and drug authorities. Photo: SCHOTT/J. Siefke

In the meantime, SCHOTT has received the official license from the SFDA to produce ampoules and vials at the company’s Chinese site in Suzhou and to supply the Chinese pharmaceutical industry from here.

The new production facility opened in the fall of 2008. This is yet another pioneer achievement, because it makes SCHOTT the first multinational manufacturer of high-quality glass packaging to operate its own manufacturing in China.

“We are planning to offer exactly what Chinese pharmaceutical companies require more and more for the international export markets: high quality packaging products,” explains the Chairman of the Board of SCHOTT AG, Prof. Dr.-Ing. Udo Ungeheuer.

The new manufacturing facility is designed to handle a capacity of 100 million vials and ampoules per year, but can also be further expanded to meet rising demand.

Ampoules and vials are currently the most important and most frequently used pharmaceutical containers. “We will be observing the market very closely and are planning to play an active role in China in the area of pre-fillable syringes and cartridges, as well,” Sackhoff says.

SCHOTT built an ultramodern factory on a 2,500 square meter lot in Suzhou. High quality raw materials, sophisticated technologies and highly qualified expertise on vials and ampoules, as well as convincing technical service, are the site’s strengths. “We are based locally and are therefore close to customers. We can supply products very quickly and also understand much better what exactly our customers are asking for or in need of,” Prof. Dr.-Ing. Ungeheuer says in explaining the strategic decision to set up operations in China.

The new manufacturing facility in Suzhou is designed to handle a capacity of 100 million vials and ampoules per year initially. Photos: SCHOTT/J. Siefke

For the most part, Suzhou supplies products to Chinese companies, many of whom received their products from other SCHOTT sites in the past. The new pharmaceutical manufacturing facility was also built based on the same rigid standards as all of the other production sites that SCHOTT operates, in accordance with the requirements of Good Manufacturing Practices (GMP).

“Nevertheless, we do not view ourselves to be a competitor for Chinese companies,” Dr. Sackhoff explains. SCHOTT is mainly interested in pursuing the high-end market. “With our know-how and quality products, we can support the Chinese pharmaceutical industry in developing on an international basis and pave the way to global markets,” he adds.
With its commitment in China, SCHOTT has added yet another building block in securing its ability to supply products.

“Many of the multinational pharmaceutical companies do not want to be supplied by one single plant only but require a second manufacturing site as a backup,” notes Jörg Doescher, Sales Director for Asia at Pharmaceutical Packaging. For this reason, SCHOTT has gradually expanded its backup capabilities in recent years. “We manufacture both glass tubing and pharmaceutical containers all over the world in the same consistently high quality, but at various sites,” he adds. Global manufacturing standards and quality systems, as well as the extensive exchange of knowledge among employees in various fields all over the world, ensure the highest possible supply security for SCHOTT customers across the globe.